Analysis of Canadian Wireless Spectrum Auctions: Kris Joseph Home university: University of Alberta Education level:
Financial Condition and Valuation Page 1 of 5 Analysis Corporate Strategy Amtelecom did not follow its strategic long term plan to expand its core telephone, cable television and internet businesses through mergers or acquisitions with other independent service providers within the same regional markets.
This report outlines that the advantages to selling the Amtelecom business outweigh the benefits of selling the ICS business or continuing as a bifurcated business. Profitability is attributed to positive growth in telecom, cable, and internet product lines over the next few years.
Profit margins increase over the forecasted period mainly due to growth in the different segments. Still, the control over debt repayment and adequate dividend payout will ensure enough liquidity to sustain the ICS operations.
The offer was abandoned later in Obviously the market value is lower than the book value, meaning AGI is trading at a discount.
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In addition, a multiples valuation approach yields similar results. Appendix G outlines multiples market values relative to book.
Despite positive growth rates for telecom, cable, and internet businesses over the next 5 years, the potential for sales growth and expansion beyond current markets is limited due to CRTC regulations and competition from large well funded players like Bell, Rogers, Telus, and Shaw. The CRTC is meant to protect consumers.
A strategic buyer for Amtelecom would have to comply with the stringent non-Canadian voting rights and common share limits. CRTC issued decisions, and throughout Amtelecom did not express concern over however the fact that competition is permitted within Amtelecoms markets demonstrates concern over growth rates in new customer acquisition.
Telecom decisions and also pose a threat to the Amtelecom sales growth and expansion into other markets. CRTC regulations moved to cap price setting but do not limit profits. Although registration and licensing Class I,II,III may pose a deterrent to new entrants, the fees associated with this type of license continue to be accrued under non-interest expenses.
Also, penetration into urban areas requires investing in infrastructure, offices, marketing and those markets are highly competitive. We agree with AGI executives on selling the telecom business. Only an aggressive growth strategy would ensure the prosperity of AGI operations coupled with financing the failed ICS acquisition.Financial Planning & Forecasting of AMTELECOM GROUP INC.
Capital Structure Analysis Business Analysis and Valuation: Text & Cases Case Studies in Financial Decision Making, Diana R.
Harrington; 2 nd Edition. Case Studies in Finance- Managing for Corporate Value Creation; Robert F. Bruner; 5 th Edition. Creating Value through . June 30, Tapestry Resource Corp.
acquires Colombian Gold assets with acquisition of Gran Colombia Gold, S.A. Is Amtelecom Group Inc.
really trading at a discount? • Do you agree with AGI’s decision to break up the company? • Based on the case information, what might be a reasonable rate of return on Please show your valuation analysis and make a recommendation to hold or sell each property along with your rationale.
The CEO of Amtelecom Group Inc. (AGI) is a recommendation to the Board on the best way to sell its subsidiary Amtelecom communication. AGI owns and operates ICS Courier, a national fixed-route courier business and Amtelecom Communications, a regional telecommunications, cable .
Mipps, Inc. was acquired by Primus in , and none of Mipps, Primus, or Birch Communications (Primus’ current owner) appears as a current licence holder in the frequencies under analysis. This finding suggests that few companies have the means to win licences at multiple auctions, and that large incumbents are favoured as auction winners.
1. Introduction. When a firm goes public, investors typically know very little about the cash flow prospects of a firm. A high level of information asymmetry prevails during the initial public offering of a firm.